Market volatility has always been a major concern for investors. Sadly, neither experts nor seasoned investors can correctly predict when a market downturn can occur. However, investors looking to generate passive income have many notable dividend stocks to opt for in the current market scenario.
Dividend stocks offer excellent yield and can provide a reasonable hedge to volatility over time. For those intrigued, here are two top Canadian dividend stocks to consider right now.
Top dividend stocks: Enbridge
Alberta-based multinational energy infrastructure company Enbridge (TSX:ENB)(NYSE:ENB) is one of the top dividend stocks on TSX right now. This company currently provides a healthy dividend yield of 6.8% at the time of writing.
Now, it’s not all about the yield. A high yield is great. However, such a yield could indicate the market is pricing in the risk of a cut, or some belief that dividend hikes could become more difficult with time.
If anything, the recent economics of Enbridge’s business have proven otherwise.
Enbridge has continued to put forward excellent earnings. These higher earnings have supported a recent dividend hike of 3%, alongside additional capital spending plans of $1.1 billion. These are not small capital outlays and suggest Enbridge’s financial position remains strong.
As a leading energy infrastructure player, I like how Enbridge is positioned right now. This company remains a top pick of mine for long-term investors seeking a defensive, high-yield option today.
Bank of Nova Scotia
Finally, we have one of my top banking picks for those seeking yield — Bank of Nova Scotia (TSX:BNS)(NYSE:BNS). Scotiabank currently provides investors with an attractive dividend yield of 4.5%. As far as bank stocks go, that’s as good as it gets — at least among the Big Five.
Scotiabank’s higher yield could be indicative of higher risk. Indeed, this company’s banking portfolio extends well outside of Canada, with major operations in central and South America.
However, I view this diversification as a good thing. Not only are cash flows geographically diversified, but Scotiabank carries higher growth potential than its peers. Thus, for those seeking a higher-income, higher-growth option in the banking space, Scotiabank is an attractive pick.
Like its banking peers, Scotiabank stands to benefit from rising interest rates. Accordingly, this stock is also a macro hedge, to some degree.
Bottom line
Right now, I think Scotiabank and Enbridge are both well-positioned dividend stocks with excellent upside. These stocks both could be core portfolio holdings for truly long-term investors right now.
